Other rescued banks'll meet recapitalisation deadline - CBN

August 23, 2011

CBN Governor Lamido Sanusi, CBN Headquarters in Abuja (background).

With about 40 days to the September 30 deadline given to the rescued Deposit Money Banks to recapitalise or face liquidation, the Central Bank of Nigeria, on Monday expressed optimism that the DMBs would clear the hurdle.

The banks that lacked the capability to meet the stipulated date, the CBN said, were those acquired by the Asset Management Corporation of Nigeria, adding that the remaining five DMBs had all signed Transaction Implementation Agreements with selected banks.

“Aside the three nationalised banks, the other five banks have signed their TIAs; the recent being that of Equitorial Trust Bank and Sterling Bank, and we are hopeful that they will meet the recapitalisation deadline,” the Head Corporate Affairs, CBN, Mr. Muhammed Abdullahi, told our correspondent.

The apex bank had on Friday, August 5, revoked the licences of three DMBs that were yet to sign TIAs. The banks were Afribank, Bank PHB and Spring Bank, and their assets and liabilities were transferred to Mainstreet Bank, Keystone Bank, and Enterprise Bank respectively.

The remaining five that had their TIAs signed were Access Bank Plc, which entered into agreement with Intercontinental Bank Plc; Union Bank Plc, with African Capital Alliance Consortium; and FinBank Plc, that had memorandum of understanding with First City Monument Bank Plc. The pacts were signed in July.

In August, Oceanic Bank International Plc reached agreement with Ecobank Transnational Incorporated, while Equitorial Trust Bank signed its TIA with Sterling Bank later in the month.

Meanwhile, Abdullahi noted that the CBN was watching the DMBs closely and would sanction any that failed to meet deadline.

The apex regulatory body noted that the financial institutions had time to complete all that was required before the date and called on the DMBs to make judicious use of the time at their disposal.

Some of the banks, had earlier explained that they would ensure they met the CBN deadline, as they noted that the parties had commenced the scheme of merger, which will be subject to the approval of the shareholders of the affected banks, as well as the approval of the CBN.

“If two days to September 30, they are yet to recapitalise, then the CBN may have to take decisive actions, but for now there is time and we expect them to comply before the deadline,” Abdullahi said.